Budget TV makers Syntax and Brillian have agreed to merge, in a move that the companies hope will help them better compete against the giants of the industry.

Under the deal, each share of privately held Syntax will be exchanged at an initial exchange rate of 1.6195 shares of Brillian stock, which is publicly traded. Syntax will own 70 percent of the resulting company. The deal will also effectively allow Syntax to go public without the mess of an initial public offering.

Once the merger is complete, the company, called Syntax-Brillian, will sell Syntax's LCD TVs, which will feature screen sizes below 50 inches in diameter, and Brillian's projection TVs for customers who want the gargantuan tube experience.

Although Syntax isn't a brand name most Americans recognize, consumers who've wandered through the aisles of big-box retailers such as Target have likely seen the company's products. Syntax, which is based in Southern California's City of Industry but relies on overseas contract manufacturers, specializes in low-cost LCD TVs and has been gaining customers with its budget approach.

Research firm DisplaySearch says Syntax is the third-largest seller of LCD TVs in North America with 7 percent of the market. In April, iSuppli noted that the company passed Sony in North America in the fourth quarter of 2004. In its most recent fiscal year, which ended June 30, 2005, Syntax had revenue of approximately $90 million, nearly triple from the year before, according to the company.

Brillian has had a more uneven history in TVs. It produces a line of big-screen projection TVs that contain its own liquid crystal on silicon (LCOS) chips. Texas Instruments currently dominates the market in this field with its DLP processors: Samsung and others are TI customers.

LCOS chips promise to be cheaper than DLP chips, but they aren't easy to make profitably. Intel cancelled an LCOS product line after a few months of poor manufacturing results. JVC and a few other Japanese companies produce LCOS-based TVs, but they mostly sell the chips to themselves, so the actual cost of the processor can be mixed into the $5,000 price tag for the TV.

Brillian had a contract with Sears to produce TVs, but the deal fell apart after product delays.